External Analysis

Question 1

What are the parts of the external analysis?

Answer 1

1. Industry Analysis
2. Industry Environment (Porter’s 5 Forces)
3. Competitor Environment (Competitor Analysis)
4. Key Success Factors
5. General Environment (PESTEL)
6. Conclusion (opportunities and threats)

Question 2

What are the stages of the Industry Life Cycle?

Answer 2

1. Introduction
2. Growth
3. Maturity
4. Decline

Question 3

What are Porter’s Five Forces?

Answer 3

1. Intensity of Competitive Rivalry
2. Threat of New Entrants
3. Bargaining Power of Suppliers
4. Bargaining Power of Buyers
5. Threat of Substitutes

Question 4

What are the barriers to entry (for threat of new entrants)?

Answer 4

1. Economies of Scale
2. Capital Requirements
3. Switching Costs
4. Technology, Capability, R&D

Question 5

Give an example of an unattractive industry

Answer 5

Airline Industry

Question 6

Give an example of an attractive industry

Answer 6

Pharmaceutical Industry

Question 7

What should be evaluated in the competitor analysis?

Answer 7

1. Future Objectives
2. Current Strategy
3. Assumptions
4. Capabilities (strengths and weaknesses)

Question 8

What does PESTEL stand for?

Answer 8

P - Political (govt policy and regulation)
E - Economic (market and consumer finances)
S - Sociocultural (values and demographics)
T- Technological (innovation and R&D)
E - Environmental (ecology and sustainability)
L- Legal (laws and regulation)

Question 9

What should you identify/conclude at the end of all the frameworks?

Answer 9

Threats and opportunities